093_SB1891

 
                                     LRB093 08663 RCE 08893 b

 1        AN ACT concerning health benefits.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.  The  State  Employees Group Insurance Act of
 5    1971 is amended by changing Section 6.5 as follows:

 6        (5 ILCS 375/6.5)
 7        (Section scheduled to be repealed on July 1, 2004)
 8        Sec. 6.5.  Health benefits for TRS benefit recipients and
 9    TRS dependent beneficiaries.
10        (a)  Purpose.  It is The purpose of this  amendatory  Act
11    of  1995  is to transfer the administration of the program of
12    health benefits established for benefit recipients and  their
13    dependent  beneficiaries  under  Article  16  of the Illinois
14    Pension  Code  to  the  Department  of   Central   Management
15    Services.
16        (b)  Transition provisions.  The Board of Trustees of the
17    Teachers'  Retirement System shall continue to administer the
18    health benefit program established under Article  16  of  the
19    Illinois  Pension  Code through December 31, 1995.  Beginning
20    January  1,  1996,  the  Department  of  Central   Management
21    Services  shall be responsible for administering a program of
22    health benefits for TRS benefit recipients and TRS  dependent
23    beneficiaries  under this Section.  The Department of Central
24    Management Services and the Teachers' Retirement System shall
25    cooperate  in  this  endeavor  and  shall  coordinate   their
26    activities   so   as   to  ensure  a  smooth  transition  and
27    uninterrupted health benefit coverage.
28        (c)  Eligibility.  All persons who were enrolled  in  the
29    Article  16  program  at  the  time  of the transfer shall be
30    eligible to participate in the program established under this
31    Section without any interruption  or  delay  in  coverage  or
 
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 1    limitation    as    to   pre-existing   medical   conditions.
 2    Eligibility  to  participate  shall  be  determined  by   the
 3    Teachers'  Retirement  System.  Eligibility information shall
 4    be communicated  to  the  Department  of  Central  Management
 5    Services in a format acceptable to the Department.
 6        A TRS dependent beneficiary who is an unmarried child age
 7    19  or  over  and mentally or physically handicapped does not
 8    become ineligible to participate by reason  of  (i)  becoming
 9    ineligible  to  be  claimed  as  a  dependent for Illinois or
10    federal income tax purposes or (ii) receiving earned  income,
11    so  long  as those earnings are insufficient for the child to
12    be fully self-sufficient.
13        (d)  Coverage.  The level  of  health  benefits  provided
14    under  this Section shall be similar to the level of benefits
15    provided by the program previously established under  Article
16    16 of the Illinois Pension Code.
17        Group  life  insurance  benefits  are not included in the
18    benefits to be provided to TRS  benefit  recipients  and  TRS
19    dependent beneficiaries under this Act.
20        The  program  of  health  benefits under this Section may
21    include any or all of the benefit limitations, including  but
22    not  limited  to a reduction in benefits based on eligibility
23    for  federal  medicare  benefits,  that  are  provided  under
24    subsection (a) of Section 6 of  this  Act  for  other  health
25    benefit programs under this Act.
26        (e)  Insurance  rates  and  premiums.  The Director shall
27    determine the insurance rates and premiums  for  TRS  benefit
28    recipients and TRS dependent beneficiaries, and shall present
29    to  the Teachers' Retirement System of the State of Illinois,
30    by  April  15  of  each  calendar  year,   the   rate-setting
31    methodology  (including but not limited to utilization levels
32    and costs) used to determine the amount of  the  health  care
33    premiums.
34        For  Fiscal  Year 1996, the premium shall be equal to the
 
                            -3-      LRB093 08663 RCE 08893 b
 1    premium actually charged in Fiscal Year 1995;  in  subsequent
 2    years,  the  premium  shall  never  be lower than the premium
 3    charged in Fiscal Year  1995.   For  Fiscal  Year  2003,  the
 4    premium shall not exceed 110% of the premium actually charged
 5    in Fiscal Year 2002.  For Fiscal Year 2004, the premium shall
 6    not  exceed  112%  of  the premium actually charged in Fiscal
 7    Year 2003.
 8        Rates and premiums may  be  based  in  part  on  age  and
 9    eligibility for federal medicare coverage.  However, the cost
10    of  participation  for  a TRS dependent beneficiary who is an
11    unmarried child age 19 or over  and  mentally  or  physically
12    handicapped  shall  not  exceed  the cost for a TRS dependent
13    beneficiary who is  an  unmarried  child  under  age  19  and
14    participates  in  the  same  major  medical  or  managed care
15    program.
16        The cost of health benefits under the  program  shall  be
17    paid as follows:
18             (1)  For a TRS benefit recipient selecting a managed
19        care program, up to 75% of the total insurance rate shall
20        be paid from the Teacher Health Insurance Security Fund.
21             (2)  For a TRS benefit recipient selecting the major
22        medical   coverage  program,  up  to  50%  of  the  total
23        insurance rate shall be  paid  from  the  Teacher  Health
24        Insurance  Security  Fund  if  a  managed care program is
25        accessible, as determined  by  the  Teachers'  Retirement
26        System.
27             (3)  For a TRS benefit recipient selecting the major
28        medical   coverage  program,  up  to  75%  of  the  total
29        insurance rate shall be  paid  from  the  Teacher  Health
30        Insurance  Security Fund if a managed care program is not
31        accessible, as determined  by  the  Teachers'  Retirement
32        System.
33             (4)  The balance of the rate of insurance, including
34        the  entire  premium  of  any  coverage for TRS dependent
 
                            -4-      LRB093 08663 RCE 08893 b
 1        beneficiaries that has been elected,  shall  be  paid  by
 2        deductions  authorized by the TRS benefit recipient to be
 3        withheld from his  or  her  monthly  annuity  or  benefit
 4        payment from the Teachers' Retirement System; except that
 5        (i)  if  the  balance of the cost of coverage exceeds the
 6        amount of the monthly annuity  or  benefit  payment,  the
 7        difference  shall  be  paid  directly  to  the  Teachers'
 8        Retirement  System by the TRS benefit recipient, and (ii)
 9        all or part of the balance of the cost of  coverage  may,
10        at  the  school  board's option, be paid to the Teachers'
11        Retirement System by  the  school  board  of  the  school
12        district from which the TRS benefit recipient retired, in
13        accordance with Section 10-22.3b of the School Code.  The
14        Teachers'  Retirement  System  shall promptly deposit all
15        moneys withheld by or paid to it under  this  subdivision
16        (e)(4)  into  the Teacher Health Insurance Security Fund.
17        These moneys  shall  not  be  considered  assets  of  the
18        Retirement System.
19        (f)  Financing.   Beginning  July  1,  1995, all revenues
20    arising  from  the  administration  of  the  health   benefit
21    programs established under Article 16 of the Illinois Pension
22    Code  or  this  Section  shall  be deposited into the Teacher
23    Health Insurance Security Fund, which is hereby created as  a
24    nonappropriated  trust  fund  to  be  held  outside the State
25    Treasury,  with  the  State  Treasurer  as  custodian.    Any
26    interest  earned  on  moneys  in the Teacher Health Insurance
27    Security Fund shall be deposited into the Fund.
28        Moneys in the  Teacher  Health  Insurance  Security  Fund
29    shall  be  used  only  to pay the costs of the health benefit
30    program established under this Section, including  associated
31    administrative  costs,  and  the  costs  associated  with the
32    health benefit program established under Article  16  of  the
33    Illinois   Pension  Code,  as  authorized  in  this  Section.
34    Beginning July 1, 1995, the Department of Central  Management
 
                            -5-      LRB093 08663 RCE 08893 b
 1    Services  may  make  expenditures  from  the  Teacher  Health
 2    Insurance Security Fund for those costs.
 3        After other funds authorized for the payment of the costs
 4    of the health benefit program established under Article 16 of
 5    the  Illinois Pension Code are exhausted and until January 1,
 6    1996 (or such later  date  as  may  be  agreed  upon  by  the
 7    Director  of Central Management Services and the Secretary of
 8    the  Teachers'  Retirement  System),  the  Secretary  of  the
 9    Teachers' Retirement System may make  expenditures  from  the
10    Teacher Health Insurance Security Fund as necessary to pay up
11    to  75%  of the cost of providing health coverage to eligible
12    benefit recipients  (as  defined  in  Sections  16-153.1  and
13    16-153.3  of  the  Illinois Pension Code) who are enrolled in
14    the Article 16 health benefit program and to  facilitate  the
15    transfer  of  administration of the health benefit program to
16    the Department of Central Management Services.
17        (g)  Contract  for  benefits.   The  Director  shall   by
18    contract,  self-insurance,  or  otherwise  make available the
19    program of health benefits for  TRS  benefit  recipients  and
20    their  TRS  dependent  beneficiaries  that is provided for in
21    this Section.  The contract  or  other  arrangement  for  the
22    provision  of  these health benefits shall be on terms deemed
23    by the Director to be in the best interest of  the  State  of
24    Illinois  and  the  TRS  benefit recipients based on, but not
25    limited to, such criteria  as  administrative  cost,  service
26    capabilities  of  the  carrier  or  other contractor, and the
27    costs of the benefits.
28        (h)  Continuation and termination of program.  It is  the
29    intention  of the General Assembly that the program of health
30    benefits provided under this  Section  be  maintained  on  an
31    ongoing, affordable basis through June 30, 2004.  The program
32    of  health benefits provided under this Section is terminated
33    on July 1, 2004.
34        The  program  of  health  benefits  provided  under  this
 
                            -6-      LRB093 08663 RCE 08893 b
 1    Section may be amended by the State and is not intended to be
 2    a pension or retirement benefit subject to  protection  under
 3    Article XIII, Section 5 of the Illinois Constitution.
 4        (i)  Repeal.  This Section is repealed on July 1, 2004.
 5    (Source:  P.A.  92-505,  eff.  12-20-01; 92-862, eff. 1-3-03;
 6    revised 1-10-03.)